A first-time candidate, Rauner defeated three other Republican officeholders and overcame a coordinated effort from labor and other Democrats designed to weaken him. With 95 percent of precincts reporting, the Associated Press called the race for Rauner, who led state Sen. Kirk Dillard ® 40 percent to 37 percent, a closer margin than many had anticipated.

Rauner spent $6 million of his own money, raising some $8 million more from donors. He fought a multimillion-dollar coordinated effort from labor unions designed to weaken him. Rauner launched his bid with a vow to take on “government union bosses,” stoking fears from public unions that he would sharply curtail their influence if elected. Labor groups sought to elevate Dillard, who opposed a pension reform measure.

Here are a few interesting details, one of which was hidden in plain sight in yesterday’s post.

First, Quinn, the current (Democratic) governor of Illinois signed the pension reform measure that has got the unions so riled up. He had only a “token Democratic opponent” yesterday, as per WaPo. …. Why? Why didn’t the unions go after Quinn like a rabid dog?

Will have to think on that one for a moment.

Second, when the teachers’ union put out their enemies list, naming Rauner, I did not note at the time that the company they were targeting had a connection to Rauner…. which ended two years ago. Let me re-run an excerpt and add some emphasis

The American Federation of Teachers is urging public pensions to review investments with Chicago-based GTCR, a private-equity firm where Rauner was chairman before stepping down in 2012. He supports shifting government workers to 401(k)- type plans from traditional defined-benefit pensions, which give retirees a payout based on years of service and final salary.

The AFT, with 1.5 million members, is scheduled to release an updated “watch list” of 29 money managers that the union says support groups opposed to traditional pensions. GTCR has $4.9 billion of commitments from U.S. public pension funds, according to Preqin Ltd., a London-based research firm. The AFT is also adding Highbridge Capital Management and a unit of London-based insurer Aon Plc to the list.

So he left in 2012 and they’re still targeting GTCR. Were they supposed to get a time machine and wipe out prior associations?

Now, I know that direct logic isn’t involved there — the whole point was to target Rauner, not necessarily GTCR. So now they’re going into an Illinois gubernatorial election where both candidates want to cut public pensions (I don’t think Quinn wants to get rid of the DB pensions entirely, but I’ll have to circle back to that.)

Way to go, guys.

There’s another “tell” in the enemies list, by the way — it’s about public employee union power, not protecting pensions, even. I understand the logic of saying that you don’t want investment managers of your pension fund if they want to get rid of the pensions. There may be some suspicion that the managers may not treat you fairly. That’s a clear fiduciary concern.

Highbridge Capital Management, another high profile new entrant, landed on the list for its CEO’s support of education reform group StudentsFirst. Glenn Dubin, co-founder of the $25 billion hedge fund now owned by JP Morgan Asset Management, made a $150,000 donation last February.
…..
After being named in the inaugural report last year, Loeb canceled an appearance at the Council of Institutional Investors’ conference and pushed back in a letter to its chair. He cited “incorrect statements about my position on the issue of defined benefit pension plans” which had “derailed” the “critical conversation we planned to have about improving corporate governance.”

“Contrary to reports,” he continued, “I have never taken a position against defined benefit plans nor has any philanthropic organization I lead. In fact, my support for and contribution to defined benefit plans is demonstrated by maximizing returns for union members who rely on us to deliver their pension goals.”

The AFT’s attempts to smear entire organizations for a single executive’s personal leanings have left many industry types uncomfortable.

The chair of one public pension system characterized the AFT’s actions as “tyrannical” during a conversation with aiCIO. The trustee also noted the irony of hedge fund managers being punished for supporting reforms that would, if successful, shut off a major source of investor capital.

It’s about union power more than protecting their pensions. They can’t have anybody that would cut off their sinecures.

Organized labor battled back out of concern that Rauner could seek to weaken unions in the same way GOP governors have in other states across the Midwest.

Rauner says he would model his governorship after those of Wisconsin Gov. Scott Walker and former Indiana Gov. Mitch Daniels. Both significantly rolled back union power in what they said were necessary steps to attract business and reduce costs. Rauner defeated state Sens. Bill Brady and Kirk Dillard and state Treasurer Dan Rutherford in the primary.
…..The typically left-leaning unions spent more than $6 million on the GOP primary, both in anti-Rauner and pro-Dillard ads. Rauner raised more than $14 million, including $6 million of his own money — more than any candidate seeking a gubernatorial nomination in state history.

Rauner warned supporters about the unions’ efforts, saying Quinn’s “allies” were trying to hijack the election. He said legislative term limits could break the labor-Democratic alliance.

I guess the unions can deal with Quinn, because he’s not trying to destroy union power, just trying to keep the pensions from going completely under (yeah, that’s not going to work… that’s for another post).

They have very good reasons to be scared of Rauner if he is able to copy Walker and Daniels. Here is a taste of what they could be in for

The state’s politically powerful American Federation of State, County, and Municipal Employees (AFSCME) suffered a 45 percent drop in revenue, as workers opted out of dues payments, according to the Capital Times.

Aw, poor unions. Have fun spending lots of money on a race you didn’t think you’d have to buy!